Waterstone Financial, Inc. (WSBF): Business Model Canvas [Dec-2025 Updated]

You're trying to get a clear picture of Waterstone Financial, Inc. (WSBF)'s strategy, and the truth is, their model is a deliberate blend of steady community banking in southeastern Wisconsin and a national mortgage origination machine. We've broken down their entire Business Model Canvas, showing how they convert a $1.31 billion core deposit base into earning assets, driving $14.6 million in net interest income from that segment alone in Q3 2025. They balance stability with the mortgage sales pipeline-that's the whole game right there. Keep reading to see the specific key activities and partnerships that underpin their $137.06 million trailing twelve-month revenue and how they aim to deliver that $0.15 per share dividend.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Key Partnerships

Waterstone Financial, Inc. relies on several external entities to execute its Mortgage Banking and Community Banking segments effectively.

• - Secondary market investors for residential mortgage loans
• - Correspondent lenders and mortgage brokers for loan origination
• - Core banking and technology platform providers (FinTech)
• - Institutional investors for capital and share repurchase programs

The Mortgage Banking segment at Waterstone Financial, Inc. originates residential mortgage loans specifically for the purpose of sale in the secondary market. Institutional investors are significant stakeholders in Waterstone Financial, Inc., holding approximately 62.7% of the company\'s stock as of late 2025. Specific institutional activity noted includes Los Angeles Capital Management LLC, which lifted its stake by 7.7% in Q2 2025.

The reliance on external origination channels is evident in the mortgage volume metrics. For the quarter ended June 30, 2025, origination volume relative to purchase activity was 91.7% of total originations. This compares to 87.5% for the quarter ended March 31, 2025. Waterstone Mortgage Corporation, a subsidiary, operates with 66 offices across 26 states to originate these loans.

Waterstone Financial, Inc. engages with the broader FinTech ecosystem, though specific core banking partners aren\'t always disclosed publicly. General industry trends show that core banking providers are increasingly partnering with hyperscalers and integrating AI/machine learning capabilities. FIS, for example, topped a leading providers ranking due to robust capabilities and global reach. WaterStone Bank offers various deposit products, including brokered certificate of deposits, with balances reaching $84.1 million at March 31, 2025.

Capital management involves active engagement with institutional investors and executing share repurchase programs. Waterstone Financial, Inc. repurchased approximately 508,000 shares in the quarter ended June 30, 2025, at a cost of $6.5 million, or $12.80 per share. This activity contributed to the book value per share reaching $18.19 as of June 30, 2025. The company returned $26 million to shareholders in 2024 via dividends and repurchases.

Here's a look at some key financial and operational metrics related to these partnerships and segments as of mid-to-late 2025:

The Community Banking segment showed a net interest income increase of 19.3%, totaling $14.6 million for the quarter ended September 30, 2025, compared to the prior year. The Mortgage Banking segment reported non-interest income of $21.0 million for the same quarter.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Key Activities

You're looking at the core things Waterstone Financial, Inc. (WSBF) does to make money and manage the bank as of late 2025. It's all about the spread between what they pay for money and what they earn on loans, plus fees from mortgages.

Generating net interest income from loan and deposit products is the bread and butter, mostly coming from the Community Banking segment. For the quarter ended September 30, 2025, consolidated net interest income hit $14.7 million, up from $11.5 million in Q3 2024. The Community Banking segment alone brought in $14.6 million of that. The net interest margin (NIM) for Q3 2025 expanded to 2.76%. Just to show the trend, Q2 2025 saw net interest income of $13.6 million.

Here's a look at that core income generation:

The Mortgage Banking segment is key for fee-based revenue through originating and selling residential mortgage loans. Mortgage banking income (noninterest income) for Q3 2025 was $20.9 million. Loan originations for that quarter saw a slight dip, down 3.5%. Back in Q2 2025, originations totaled $588.8 million, which was down 7.1% from the year prior. The total Residential Mortgage Loans held by Waterstone Financial, Inc. stood at $1,289.46 million as of September 2025.

Managing the investment security portfolio involves keeping an eye on unrealized losses, which directly impacts accumulated other comprehensive income. As of September 30, 2025, the available-for-sale securities carried unrealized losses of $18.5 million. That's a definite improvement from the $24.5 million in unrealized losses reported at the end of 2024.

Maintaining strong asset quality and operational efficiency shows up in the numbers, and things look tight. Nonperforming assets (NPA) as a percentage of total assets improved to 0.27% at September 30, 2025, down from 0.37% in the prior quarter. Past due loans as a percentage of total loans were just 0.50% at the end of Q3 2025. Operationally, the Community Banking segment's efficiency ratio for Q3 2025 was 48.94%, a big jump from 60.35% in Q3 2024. Plus, they recorded a credit to the provision for credit losses of $0.3 million in Q3 2025.

Executing the active share repurchase program is a way to return capital and boost book value per share. At September 30, 2025, the company had 18,524,115 outstanding shares. The book value per share reached $18.65 by that date. The buybacks in Q3 2025 added about $0.07 to the book value per share. For context, in Q2 2025, they repurchased approximately 508,000 shares for a cost of $6.5 million.

You can see the share count reduction over time:

• Shares outstanding in 2021: 24,795,124.
• Shares outstanding at September 30, 2025: 18,524,115.
• Book value per share at September 30, 2025: $18.65.

Finance: draft 13-week cash view by Friday.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Key Resources

You're looking at the core assets that let Waterstone Financial, Inc. operate and compete. These aren't just line items; they are the engine room of the business.

The foundational resource is WaterStone Bank SSB, the primary banking subsidiary, which itself was established way back in 1921. This entity handles the core community banking functions. Also critical is the mortgage arm, Waterstone Mortgage Corporation, which is a wholly owned subsidiary and extends the firm's reach significantly.

The lending portfolio is a major asset. As of the quarter ended June 30, 2025, the average loans held for investment totaled approximately $1.67 billion. This portfolio is composed of key asset classes, though you should note that single-family mortgages saw a decrease during that period, offset by growth in commercial real estate and multi-family mortgages.

Funding this asset base relies on deposits. The core retail deposit base, excluding brokered and escrow accounts, averaged about $1.31 billion for the quarter ending June 30, 2025. To be fair, by the third quarter ending September 30, 2025, total deposits had actually grown to $1.39 billion. The sources of funds are primarily retail deposits, including certificates of deposit, money market savings accounts, and transaction deposit accounts.

The physical and operational footprint is another key resource, tying into the regional strategy:

• - WaterStone Bank SSB maintains 14 locations across Milwaukee, Waukesha, and Washington counties in Wisconsin.
• - The mortgage subsidiary, Waterstone Mortgage Corporation, supports the Arizona presence with known branch locations in Glendale, AZ, and Scottsdale, AZ.
• - Overall, Waterstone Mortgage Corporation operates 78 offices in 26 states across the United States.

The human capital and financial backing are just as important as the balance sheet numbers. Here's a quick look at the leadership structure as of late 2025:

This experienced management team, with an average tenure of 10.7 years, is tasked with deploying the firm's financial capital effectively. For instance, in 2024, Waterstone Financial, Inc. returned $26 million to shareholders via dividends and stock repurchases while increasing tangible book value. The structure also separates the roles of Chairman and CEO, which the board believes offers an appropriate balance of authority.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Value Propositions

You're looking at what Waterstone Financial, Inc. offers its customers and shareholders as of late 2025. It's a mix of local relationship focus and national reach in lending, backed by solid balance sheet metrics.

The core value proposition centers on a relationship-based community banking service through WaterStone Bank. This local focus is evident in their physical footprint, operating 14 branch locations across southeastern Wisconsin as of late 2025. The Community Banking segment shows operational discipline, evidenced by an efficiency ratio that improved to 48.94% in the third quarter of 2025.

For investors, the commitment to shareholder value is clear through consistent cash returns. Waterstone Financial, Inc. provides shareholder value via quarterly dividends of $0.15 per share. This translates to an annual dividend of $0.60 per share. The company also actively manages its capital base; for instance, in the third quarter of 2025, they repurchased approximately 270,000 shares.

The value proposition includes offering comprehensive consumer and business banking products. The Community Banking segment drives much of the core performance, with net interest income increasing significantly year-over-year in recent quarters. As of Q1 2025, average core retail deposits (excluding brokered and escrow accounts) totaled $1.28 billion.

When you look at strong asset quality and financial stability, the numbers from the end of the third quarter of 2025 tell a good story. Here's a quick look at some key metrics:

The firm also provides residential mortgage lending expertise across multiple states. This is handled by WaterStone Mortgage Corporation, which is licensed as a national lender in 48 states. This segment contributed a pre-tax profit of $1.3 million in the third quarter of 2025, showing profitability even with seasonal origination volume shifts.

The value proposition is supported by the following operational and financial facts:

• Relationship-based community banking service in southeastern Wisconsin.
• Strong asset quality metrics, with Nonperforming Assets at 0.27% of total assets as of September 30, 2025.
• Comprehensive consumer and business banking products.
• Shareholder value via quarterly dividends of $0.15 per share.
• Residential mortgage lending expertise via a national lender licensed in 48 states.

Finance: review the impact of the $0.15 dividend on the Q4 2025 payout ratio by next Tuesday.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Customer Relationships

You're looking at how Waterstone Financial, Inc. keeps its customers engaged across its Community Banking and Mortgage Banking segments. It's a mix of local presence and digital reach, which is key for a regional player.

Personalized service through the physical branch network

Waterstone Financial, Inc. maintains a physical footprint primarily focused on relationship banking in Wisconsin. While the exact late 2025 branch count isn't public, historical data shows the bank operated locations across key areas like Wauwatosa, Brookfield, and Milwaukee, Wisconsin. This network supports the delivery of a full suite of personal and business banking products. The Community Banking segment focuses on tailoring solutions for small and medium-sized enterprises alongside retail customers.

Dedicated relationship managers for business banking clients

For business clients, the approach is definitely high-touch. The Vice President - Director of Business Banking, for example, leads a portfolio boasting over 175 customers and approximately $110,000,000 in loans. This structure ensures dedicated attention for commercial real estate, multi-family mortgages, and specialized business needs. You see this commitment reflected in the hiring of experienced professionals, such as those with over 10 years of experience coming from institutions like U.S. Bank to serve as Business Banking Relationship Managers.

Automated and self-service via online and mobile banking

The self-service layer is crucial for efficiency, especially as the overall deposit base grows. For the quarter ended June 30, 2025, average core retail deposits totaled $1.31 billion. Industry-wide, over 83% of U.S. adults used digital banking services as of 2025, and 72% of global banking customers prefer mobile apps for core services. Waterstone Financial, Inc. supports this with online banking and bill pay services to handle routine transactions, helping keep the efficiency ratio low-it hit 50.40% for the quarter ended June 30, 2025.

High-touch, advisory approach for complex loan products

When it comes to more complex financing, the advisory model kicks in. Waterstone Mortgage Corporation, a wholly owned subsidiary, supports clients by lending in 48 states. This national reach for mortgage products, including specialty and portfolio programs, necessitates an advisory approach to navigate varied state regulations and unique client financing structures. The bank's focus on relationship-based solutions suggests that complex loan origination, which accounted for 91.7% of originations in Q2 2025, involves significant client consultation.

Here are some key figures supporting the scale of the customer relationships Waterstone Financial, Inc. manages as of mid-to-late 2025:

The Business Banking division leader manages a portfolio of over 175 customers, showing the depth of relationship focus there. Also, the company reported consolidated net income of $7.9 million for the quarter ended September 30, 2025, which is the result of these managed relationships.

You should check the Q4 2025 earnings release, estimated for January 27, 2026, for the most current metrics on digital engagement and deposit growth to see how these relationship strategies are translating into year-end results. Finance: draft 13-week cash view by Friday.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Channels

Waterstone Financial, Inc. uses a multi-faceted approach to reach its Customer Segments, blending physical presence with extensive digital capabilities for both its Community Banking and Mortgage Banking operations.

• - WaterStone Bank branch locations: 14 locations across Milwaukee, Waukesha, and Washington counties in southeastern Wisconsin.
• - Online and mobile banking platforms: Supports core retail deposits averaging $1.31 billion in Q3 2025.
• - Dedicated mortgage origination platform: WaterStone Mortgage Corporation is licensed nationally in 48 states.
• - ATM network and debit/credit card services: Offered as part of the Community Banking segment's transactional solutions.

The physical channel for WaterStone Bank is concentrated, serving the local community banking needs within southeastern Wisconsin.

The Mortgage Banking segment relies heavily on its dedicated origination platform to drive volume, which is primarily purchase-focused.

• - Purchase activity accounted for 90.1% of mortgage originations in Q3 2025.
• - Gross margin on loans sold for the quarter ended June 30, 2025, was 3.84%.
• - Loan originations for the quarter ended March 31, 2025, totaled $387.7 million.

Debit and credit card services are tied directly to the deposit base, which supports the bank's overall asset scale. The total assets for Waterstone Financial, Inc. were reported around $2.3 billion in late 2025.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Customer Segments

You're looking at the core groups Waterstone Financial, Inc. (WSBF) serves through its Community Banking and Mortgage Banking operations as of late 2025. The Community Banking segment is where the bulk of the relationship-based customer service happens, covering individuals and local businesses.

The primary customer groups Waterstone Financial, Inc. (WSBF) targets are:

• - Retail customers and consumers in local communities
• - Small and medium-sized enterprises (SMEs)
• - Multi-family real estate investors
• - Institutional and individual investors (WSBF shareholders)

For the retail and SME base, which falls under the Community Banking segment, the scale of deposits and lending activity gives you a clear picture of their market penetration. As of September 30, 2025, total deposits stood at $1.39 billion, supporting the consumer and business banking products offered. The total loan receivable balance across the company was $1.71 billion at that same date. The segment's operational strength is clear in its third quarter 2025 performance, posting pre-tax income of $8.4 million on net interest income of $14.6 million.

Here's a quick look at the balance sheet context for these banking customers as of the third quarter end:

While Waterstone Financial, Inc. (WSBF) focuses on residential mortgage loans for the secondary market in its Mortgage Banking segment, the Community Banking segment serves the local needs, including those of multi-family real estate investors through its business banking products. We see evidence of the loan book composition, as average loans held for investment decreased in the second quarter of 2025 due to a reduction in single-family mortgages.

Turning to the shareholders, the institutional interest in Waterstone Financial, Inc. (WSBF) is quite defined. As of the latest reporting cycle ending September 2025, there were 99 institutional filers. Their collective stake moved to 48.73% of the company. The total shares outstanding at September 30, 2025, was 18,524,115. You can track the value proposition to these investors through metrics like book value per share, which stood at $18.65 on September 30, 2025. The company actively manages this segment by returning capital; for instance, they repurchased approximately 270,000 shares in the third quarter of 2025 at a cost of $3.8 million.

The direct return to shareholders is also quantified:

• - Quarterly dividend declared for Q3 2025: $0.15 per common share
• - Book Value Per Share (Sep 30, 2025): $18.65
• - Shares Outstanding (Sep 30, 2025): 18,524,115
• - Market Capitalization (Sep 30, 2025): $291M

Finance: review the Q4 2025 loan origination volume against the Q3 2025 figure of $539.4 million to gauge SME/Retail demand next week.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Cost Structure

Waterstone Financial, Inc.'s cost structure is heavily influenced by funding costs, personnel, and the operational overhead of its community banking footprint.

The primary cost component related to funding operations is the interest expense on deposits and borrowed funds. For the third quarter of 2025, total interest expense was reported at $14.8 million, a figure that declined year-over-year, contributing to the rise in net interest income.

Personnel costs are significant, reflecting the commitment to a relationship-based model with over 600 employees as of late 2025. For the quarter ended June 30, 2025, total compensation, payroll taxes, and other employee benefits totaled $16.3 million. This was a decrease from the $16.9 million reported for the same period in 2024.

General and administrative expenses, along with other noninterest expenses, are a key area of focus. For the third quarter of 2025, consolidated noninterest expense decreased to $27.5 million. Specific costs within this category include legal settlement expenses. For instance, professional fees, which included legal services for the finalization of a previously disclosed lawsuit, totaled $1.4 million for the quarter ended March 31, 2025. Waterstone Financial, Inc. maintained a $1.3 million accrual related to this legal matter as of December 31, 2024.

The efficiency of the Community Banking segment is a direct measure of how well these fixed and variable costs are managed against revenue generation. The efficiency ratio for the Community Banking segment in the third quarter of 2025 was 48.94%, a marked improvement from 60.35% in the third quarter of 2024.

Here's a look at some of the key cost and efficiency metrics from recent periods:

While specific quarterly figures for occupancy and equipment costs are not explicitly detailed as a standalone line item in the latest summaries, they are captured within the consolidated noninterest expense of $27.5 million for Q3 2025. The company operates 14 banking offices in Wisconsin.

The cost structure also reflects management actions taken to control expenses, such as the decrease in personnel costs in Q1 2025 being driven by reduced employee headcount and lower commission expense.

• Personnel and compensation expenses for 600+ employees.
• Interest expense on deposits and borrowed funds for Q3 2025 was $14.8 million.
• Legal settlement costs contextually appeared as elevated professional fees of $1.4 million in Q1 2025.
• The efficiency ratio for the Community Banking segment improved to 48.94% in Q3 2025.

Finance: draft Q4 2025 expense forecast by next Tuesday.

Waterstone Financial, Inc. (WSBF) - Canvas Business Model: Revenue Streams

Waterstone Financial, Inc. generates its revenue primarily through its two operating segments: Community Banking and Mortgage Banking. The overall financial performance as of late 2025 shows a total trailing twelve-month revenue of $137.06 million.

The core revenue components driving the business model include:

• - Net interest income from Community Banking, which was $14.6 million for the quarter ended September 30, 2025.
• - Income derived from the Mortgage Banking segment, which involves the gain on sale of residential mortgage loans. For Q3 2025, mortgage banking income was reported at $20.9 million.
• - Revenue from service charges and fees on deposit accounts, which is a component of noninterest income. For the quarter ended March 31, 2025, service charges on loans and deposits were $0.593 million.

You can see the breakdown of key revenue sources for the third quarter of 2025 compared to the prior year's third quarter in the table below. Note that the Mortgage Banking income is the primary driver of the Noninterest Income line item.

The Community Banking segment's strong performance in Q3 2025 was supported by a significant increase in net interest income, up 19.3% year-over-year, driven by higher loan yields and lower funding costs. This segment's efficiency ratio improved to 48.94% from 60.35% the prior year. Still, the Mortgage Banking segment managed to generate pre-tax income of $1.3 million in Q3 2025, a notable jump from $144,000 in Q3 2024, despite a 3.5% decrease in loan originations for the quarter.

Other elements contributing to the noninterest income, which includes service charges and fees, are detailed by the overall results:

• Total Noninterest Income for Q3 2025 was $22.3 million.
• Mortgage Banking Income accounted for $20.9 million of that total.
• The remainder of Noninterest Income, which contains service charges and fees, was approximately $1.4 million for the quarter.

This structure shows a heavy reliance on the net interest margin from core lending activities, supplemented by the sale of originated mortgages.